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> When we have around a billion 'surplus to requirements' people in the world, what is our plan? See, the labor market isn't going to cut it when labor has beco

> When we have around a billion 'surplus to requirements' people in the world, what is our plan? See, the labor market isn't going to cut it when labor has become moot to industry. Can you give an estimate for when you think labor will become moot to industry? I think such predictions are based on the lump of labor fallacy. [1] The US and many other parts of the world have a labor shortage and all those missing workers will need to be supplanted by AI first. China in particular has a factory labor shortage that's going to intensify due to demographics. [2] It's very ironic that amidst unprecedented automation there is also a potential economic calamity due to inflation driven in part by labor shortages. Automation tends to create more demand for labor in other areas due to Jevons paradox. [3] So ultimately widespread deployment of AI might make things somewhat more efficient, but it may not fix labor shortages and actually make them worse. Surprising, huh? > It seems two centuries of economic theory about the place of labor will be made irrelevant. Workers own the means of production? Hah, what does that even mean when there are no 'workers'? You might be right that most recent economic theory will turn out to be bunk due to outdated economic assumptions. AI makes certain things cheaper and others more expensive due to Baumol's cost disease. [4] > We'll need new ideas about how an economy should (must) work to provide for all. Agreed. [1] https://en.wikipedia.org/wiki/Lump_of_labour_fallacy https://en.wikipedia.org/wiki/Lump_of_labour_fallacy [2] https://www.scmp.com/economy/china-economy/article/3163097/chinas-factories-are-wrestling-labour-shortages-age-old https://www.scmp.com/economy/china-economy/article/3163097/c... [3] https://en.wikipedia.org/wiki/Jevons_paradox https://en.wikipedia.org/wiki/Jevons_paradox [4] https://en.wikipedia.org/wiki/Baumol%27s_cost_disease https://en.wikipedia.org/wiki/Baumol%27s_cost_disease

JoeAltmaier 4y ago
Could those be part of the irrelevant backlog of economic theory? Jevons assume workers would be required in the created industries - no longer a thing, at least not in the medium term because automation will create those new things. And 'lump of labor'? Again, when there is little or no labor needed to mass produce anything, rules-of-thumb about labor distribution are moot. China's labor shortages may have a lot to do with the last few years, and a temporary phenomenon. It will take a decade for automation to catch up there but catch up it will. Accelerated by 'labor shortage' issues. And again, Baumol's is predicated on folks actually having a job. Folks who fall out of the labor market (30M in America) cannot all be retrained as Engineers. Even if they could, we don't need 30M more Engineers. It's going to be a rocky road.
- andrewjl 4y ago
  There are many steps needed in order to "create those new things." Not all of them can be automated in the short-term or the medium-term for that matter. That's where most though not all of the job growth will concentrate. Labor shortages are not a temporary phenomenon, whether here in the US or elsewhere. They are already locked for at least several generations due to present-day demographics and family trends. Empty Planet by Darrell Bricker & John Ibbitson explains why far better than I can. There are plenty of open jobs for all types of skills. Not everyone needs to be retrained as an engineer.

JoeAltmaier 4y ago

Could those be part of the irrelevant backlog of economic theory? Jevons assume workers would be required in the created industries - no longer a thing, at least not in the medium term because automation will create those new things. And 'lump of labor'? Again, when there is little or no labor needed to mass produce anything, rules-of-thumb about labor distribution are moot. China's labor shortages may have a lot to do with the last few years, and a temporary phenomenon. It will take a decade for automation to catch up there but catch up it will. Accelerated by 'labor shortage' issues. And again, Baumol's is predicated on folks actually having a job. Folks who fall out of the labor market (30M in America) cannot all be retrained as Engineers. Even if they could, we don't need 30M more Engineers. It's going to be a rocky road.

andrewjl 4y ago
There are many steps needed in order to "create those new things." Not all of them can be automated in the short-term or the medium-term for that matter. That's where most though not all of the job growth will concentrate. Labor shortages are not a temporary phenomenon, whether here in the US or elsewhere. They are already locked for at least several generations due to present-day demographics and family trends. Empty Planet by Darrell Bricker & John Ibbitson explains why far better than I can. There are plenty of open jobs for all types of skills. Not everyone needs to be retrained as an engineer.